INSUBCONTINENT EXCLUSIVE:
North Carolina has been rising as an entrepreneurial hub
It now home to massive deals, like IBM buying Red Hat for $34 billion and Fortnite maker Epic Games raising a landmark $1.25 billion, both
which helped to put the state — and the Triangle region, in particular — on the map
And now it just minted another unicorn with Pendo last fundraise
But its tech hub potential can still be threatened by the state political swings, said Salesforce Ventures head John Somorjai, who spoke
today at a tech event in Durham.
On a panel at Bull City Venture Partners& Entrepreneurs& Series 2019, Somorjai reminded the audience that
investment in the state follows the talent
And a state can&t attract talent when it not &welcoming to all people,& he said.
North Carolina has had a difficult history on this front,
if you recall.
In 2016, PayPal canceled plans to open a global operations center in Charlotte after N.C
passed the controversial (&bathroom bill&) law that prevented cities from creating non-discrimination policies based on gender identity
The state lost 400 potential jobs, as a result
Over 100 other companies, including Apple, Google, Twitter, Facebook, eBay, Uber, and others also asked the state to repeal the law after
eventually revised the law, then reached a settlement this summer that allows transgender people to use certain bathrooms matching their
But in some cases, it was too late to woo the tech companies back.
Apple and Amazon have also been separately criticized, at times, for
area investments because of the state anti-LGBTQ leanings.
This issue now has a broad effect on the state ability to attract tech and
business investment at a time when investors are oftenlooking outside the Valley (and its obscene valuations) to find companies that are
more focused on profitability.
Salesforce Ventures, a strategic investor who keeps its stake below 15%, isn&t hesitant to fund companies
beyond Silicon Valley — it has five investments in N.C
and 15 overall in the larger region, for example
And 75% of its investments were made outside of California, Somorjai noted.
But when asked what North Carolina biggest challenge was, in
terms of becoming home to a startup community, he alluded to the state politics and its history of divisive laws.
&Before the last election,
there was an environment here that wasn&t really welcoming to all people,& Somorjai said
&One of [Salesforce&s] core tenants — our core values — is equality
And there really sound business sense behind that,& he explained
&If you have discriminatory policies, people don&t feel welcome
If they don&t feel welcome, they&re not going to want to work there
And you will never be able to attract the best talent.&
&Money flows to where the talent is,& he added.
He also suggested to the event
audience — a group of some 450 entrepreneurs and hundreds more working in the area startup ecosystem — that local community leaders
should remain vigilant about these sorts of problems.
&If you&re complacent, it can happen again,& he said.
Despite the concerns, Somorjai
was generally positive about the ability for strong startups to arise in N.C.
Salesforce Ventures itself invested in two N.C
area unicorns — Pendo and nCino — and it just acquired Charlotte-based MapAnything, which gives it some 200 new employees in the Tar
Elsewhere in N.C., startups AvidXchange, Red Ventures, and Tresata all have unicorn valuations.
&One thing we&ve been so excited about is
— you have these tremendous universities that are putting out great engineers every year
And you have a growing group of investors that are investing in this area
There also now so much talent here that you&re attracting investors from all over the country,& he told the audience
&I think that great.&
Image credit, top: SeanPavonePhoto/Getty Images
